Bernanke: Weak recovery ahead

Fed chairman said high unemployment and tight credit will limit economic growth, but he dismissed worries about another recession and dollar weakness.
By Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) — Federal Reserve Chairman Ben Bernanke said the recovery in the U.S. economy will be modest, with higher than desired levels of unemployment in the foreseeable future.

Speaking to the Economic Club of New York Monday, Bernanke said in his prepared remarks that financial conditions are significantly better than when he spoke to the club a year ago at the height of the crisis in global financial markets.

But Bernanke cautioned that “some important headwinds — in particular, constrained bank lending and a weak job market — likely will prevent the expansion from being as robust as we would hope.”

He didn’t offer much immediate hope of a better labor market in the United States either.

“Jobs are likely to remain scarce for some time, keeping households cautious about spending,” he cautioned.